A Pair of Energy Plays

The energy sector, with the exception of the refiners, has performed well in July after underperforming the overall market in the first half of the year. I believe this strong performance will continue for the rest of the year and I am overweight the sector. Oil prices remain above $100 per barrel, valuations are reasonable and the sector is delivering one thing that the overall market seems hard pressed to: robust growth in earnings and revenues. I particularly like some of the fast-growing small-cap Exploration & Production names that are core drivers of the continuing domestic energy production expansion in the U.S. Here are two plays I have not covered previously on Real Money.

Diamondback Energy (FANG) is a small, independent E&P concern whose production comes solely from its acreage (over 50,000 net acres) in Texas's Permian Basin. Aside from having one of most memorable ticker symbols in the market, the stock has more than doubled since going public in October 2012. The company is experiencing robust production growth, ending 2012 producing some 4,300 barrels of oil equivalent/day, and is already running at more than 6,000 BOE/D currently. It has guided toward 7,200 to 7,500 BOE/D by the end of this year....276 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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